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Deloitte: Stable Economic Fundamentals Keep Consumer Spending Outlook on Track

NEW YORK, May 20, 2013 — The Deloitte Consumer Spending Index (Index) dipped slightly in April, primarily due to an increase in the tax rate, while other economic fundamentals remain steady. The Index tracks consumer cash flow as an indicator of future consumer spending .

“Despite a minor backslide in April, the Index has remained stable over the past six months, staying at a level that typically indicates sustained consumer spending in the near term,” said Daniel Bachman, senior U.S. economist, Deloitte Services LP.  “The employment picture continues to improve gradually, with revisions in the last two months reflecting stronger growth than initially reported. The retail sector – the largest private sector employer – added 29,000 jobs in April, bolstering confidence in the industry and the broader economy, even as the effects of the sequester and tax increases continue to impact consumers.”

The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices — fell slightly this month to 3.98 from a reading of 4.4 the previous month.

“The question at the top of retailers’ minds is whether the economy will limp along or accelerate during the second half of the year,” said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. “While retailers try to get consumers to warm up to summer merchandise after a cool spring, they are also in the thick of holiday planning and inventory orders. Long term, they should be prepared for continued consumer resilience, but stay vigilant should a skittish consumer return when the debt ceiling debate resumes. Retailers should consider how to most effectively use their stores in combination with mobile and dot com to win in the omnichannel game. The retailers who plan for scenarios where merchandise is offered both online and in-store while also responding to inventory levels and weather trends with nimble pricing will likely see fewer markdowns and more full-price sales.”

Highlights of the index include:

Tax burden: The tax burden ticked up slightly from the previous month, but is up 2.1 percent from the same period last year. 

Initial unemployment claims: Claims continued to head downward, to 352,000, from 355,750 the previous month.

Real wages: Hourly real wages remained relatively steady at $8.75.  

Real new home prices: Real new home prices in March were $106,310, up 1.5 percent from this time last year, though down from the previous month. 

For a historical analysis of Deloitte’s Consumer Spending Index compared to real consumer spending, visit:

About Deloitte’s Retail & Distribution practice

Deloitte is a leading presence in the retail and distribution industry, providing audit, consulting, risk management, financial advisory and tax services to 80 percent of the Fortune 500 retailers. With more than 1,400 professionals, Deloitte’s Retail & Distribution practice provides insights, services and solutions assisting retailers across all major subsectors including apparel, grocery, food and drug, wholesale and distribution and online. For more information about Deloitte’s retail & distribution sector, please visit

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

i The Deloitte Consumer Spending Index is a proprietary methodology that analyzes economic factors to gauge consumer cash flow as an indicator of future spending. Deloitte’s analysis includes data from the U.S. Commerce Department, Bureau of Economic Analysis, U.S. Bureau of the Census, U.S. Department of Housing and Urban Development and the U.S. Department of Labor.


Courtney Flaherty
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